Bank of East Asia and NWS Holdings to Begin Sales Process for Tricor Holdings

By Julie Steinberg and Kane Wu

HONG KONG–A big local bank in Hong Kong, under pressure from activist investor Elliott Management Corp. to sell itself, is jettisoning a unit that provides back-office services to a range of companies including many Hong Kong and Singapore-listed firms.
Bank of East Asia Ltd. is working with Goldman Sachs Group Inc. on the sale of Tricor Holdings Ltd., which is set to get under way before the end of the month, according to people familiar with the situation. Private-equity firms including Carlyle Group LP and Baring Private Equity Asia have expressed interest in the business, but no formal bids have been submitted yet, according to the people.

New York-based hedge fund Elliott, which as of Dec. 31 owned about 7% of Bank of East Asia, has repeatedly urged the Hong Kong bank to explore selling itself, citing mismanagement by its chairman, David Li. Bank of East Asia in February dismissed Elliott’s suggestions of a sale as “short-term focused” and said it was a “poor time to contemplate a sale.”

In recent years, Hong Kong’s family-run banks have become prime acquisition targets, driven by a number of mainland Chinese firms looking to get a toehold overseas. Regional banks in Asia have also made bids for local lenders, seeking a potential gateway to more business in China.

Singapore lender Oversea-Chinese Banking Corp.’s $5 billion acquisition of Hong Kong’s Wing Hang Bank Ltd. in 2014 also put it at odds with Elliott after the fund increased its stake in Wing Hang to nearly 8% as OCBC was gathering shares to complete its takeover. Under Hong Kong rules, OCBC needed shareholders to turn over at least 90% of Wing Hang shares to take the bank private. The Singapore bank prevailed in the battle and wasn’t forced to raise its bid for Wing Hang.

Bank of East Asia appears ready to sell a noncore asset in Tricor that could help it appease some shareholders and win their support for its management’s plans over the outright sale proposed by Elliott. Bank of East Asia owns a 75.61% stake in Tricor and fellow shareholder NWS Holdings Ltd., the infrastructure and services branch of Hong Kong blue-chip property company New World Development Co., owns the rest. Bank of East Asia said in February it and NWS Holdings were reviewing their investment in the company, including a possible sale of their entire stakes. Goldman is also advising NWS Holdings on the sale.

A Bank of East Asia spokeswoman said the bank “will make [an] announcement as and when appropriate.” A NWS Holdings spokeswoman declined to comment.

Tricor provides services such as accounting and financial reporting, payroll and payment administration and corporate governance, according to its website. It has offices in 36 cities across 19 countries and territories.

Write to Julie Steinberg at julie.steinberg@wsj.com and Kane Wu at Kane.Wu@wsj.com

Breaking the story

Julie Steinberg and Kane Wu broke the news that Hong Kong’s Bank of East Asia is working with Goldman Sachs on the sale of Tricor Holdings, which is set to get under way before the end of the month.

Timeline

May 10, 2016, 11:49

Bank of East Asia and NWS Holdings to Begin Sales Process for Tricor Holdings — Sources

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